Court File and Parties

COURT FILE NOs.: CV-20-00649437-0000, CV-22-00676721-0000 DATE: 20230227 ONTARIO SUPERIOR COURT OF JUSTICE

BETWEEN:

DONALD MILNE Applicant – and – THEODOSIUS MARGARITIS Respondent

Counsel: Paul Hancock, for the Applicant Andrew Wood, for the Respondent

HEARD: February 2, 2023

Dineen J.

[1] This is a case about a very unfortunate property dispute between next door neighbours. The Applicant seeks an order recognizing him as the owner of a narrow strip of land along the border between his backyard and the Respondent’s backyard. He does so on two alternative bases: first, that the previous owners of his property and him as their successor acquired possessory title over the disputed area through adverse possession; and second, that he has made lasting improvements to the disputed area in the belief that it belonged to him, and accordingly should be granted title pursuant to s. 37 of the Conveyancing and Law of Property Act, R.S.O. 1990, C.34.

[2] The Respondent seeks an order dismissing the application and directing the Applicant to remove portions of a fence, gate, wooden stairs, and retaining wall he built on the disputed area, within 45 days.

[3] The Applicant and the Respondent own adjacent houses. The Applicant’s house is to the east of the Respondent’s house. The adverse possession issue turns on a dispute between the parties over work the Applicant undertook in his backyard when he purchased his property in 1996. The Respondent contends that, in the course of renovations to both the house and backyard in which the Applicant (among other work) rebuilt a fence and retaining wall along the boundary, the Applicant moved the existing fence line to the west to incorporate the disputed area of approximately 21.5 square feet. The Applicant disputes this. He takes the position that the recognized and effective boundary between the properties has been to the west of the legal property line for decades, and that the work he did on the yard was consistent with the pre-existing border.

Factual background

[4] The disputed strip of land lies between 81 and 83 Pears Avenue, two residential properties in Toronto. Pears Avenue runs roughly east-west, and 81 Pears is to the east of 83 Pears. The Applicant bought 81 Pears from Linda L’Aventure and became the owner on May 15, 1996. At the time, 83 Pears was owned by the Respondent’s father Kyrkarios, who lived there from 1956 to his death in 2017. The Respondent lived there for some of his childhood and visited regularly at other times.

[5] Both properties have houses at the north end of their lot. At the time of the sale, the apparent dividing line between the properties was marked with a wooden fence that ran north-south that was followed by a stone retaining wall. At the south end of the properties, 83 Pears had a car port and there was a roughly four-foot incline going down from 83 to 81 Pears. A large maple tree was located near the south border of both properties directly across the boundary line.

[6] After acquiring 81 Pears, the Applicant carried out extensive work in both the house and the backyard area. His brother Fraser served as his contractor. This work included removing the existing fence, raising the level of the south end of the yard and pouring concrete to create a car pad, and building stairs, a gate, a retaining wall and a new fence.

[7] Upon Kyrkarios’s death, the Respondent inherited 83 Pears and sought to use it as his family home. His wife, an architect, sought to design a new plan for their backyard. A survey they commissioned to assist in this purpose revealed that there was a small encroachment from 81 Pears into their backyard. She wished to make use of the entire deeded area and approached the Applicant about alterations to the gate, stairs, and fence to reflect the correct property line.

[8] Negotiations unfortunately broke down and this litigation followed. The parties disagree on who bears responsibility for this and I will not review their conflicting evidence in these reasons. Relations also worsened when the Respondent removed portions of the fence against the Applicant’s wishes after it was ordered taken down by the City of Toronto.

The legal issues

Has the Applicant established a right to the disputed area through adverse possession?

The applicable legal principles

[9] In Mueller v. Lee, Perrell J. outlined the requirements for a claim of adverse possession at paras. 11-12:

It may be helpful to observe that the three requirements allude to the two factors that determine legal possession; that is: (1) control of the property; and (2) the intention to possess the property.

The three requirements of an adverse possession claim are:

(1) the claimant and or his predecessors must have actual possession for the statutory period [i.e., 10 years];

(2) the claimant’s possession must be with the intention of excluding the owner or persons entitled to possession; i.e. the claimant must have an animus possidendi; and

(3) the owners and any others entitled to possession must be out of possession (discontinuance of possession) for the statutory period.

[10] As Dawe J. reviewed in McCracken Estate et al. v. Gatt et al., 2023 ONSC 105 at paras. 66-68:

A person who acquires possessory title over land, and in so doing extinguishes the original owner’s legal title, is said to acquire the land through “adverse possession”.

The doctrine of adverse possession only applies to lands governed by the Registry Act. Section 51(1) of the Land Titles Act, R.S.O. c L.5 states that notwithstanding the Real Property Limitations Act:

… no title to and no right or interest in land registered under this Act that is adverse to or in derogation of the title of the registered owner shall be acquired hereafter or be deemed to have been acquired heretofore by any length of possession or by prescription.

However, s. 51(2) preserves adverse possession claims that crystallized before the land at issue was registered under the Land Titles system. As the Ontario Court of Appeal recently explained in Billimoria v. Mistry, 2022 ONCA 276, at para. 28, “land that is registered in Land Titles cannot be obtained by adverse possession unless the ten-year exclusion period ran before the land was registered.”

[11] In this case, the properties at issue were converted to the Land Titles system in 2002. Accordingly, the dispute between the parties hinges on whether the Applicant moved the fence line in 1996. If he did, as the Respondent contends, he and his predecessors would not have had actual possession of the disputed property for the ten-year period necessary to acquire possessory title before the conversion date.

[12] On the other hand, if the Applicant’s position that he rebuilt the fence in 1996 to follow the pre-existing fence line is correct, this would support the inference that previous owners of 81 Pears acquired possessory title over the disputed property, extinguishing the legal title of the then-owner of 83 Pears.

The evidence relied on by the parties

[13] The parties and their counsel have diligently put forward a variety of arguments and evidence supporting their positions on the location of the apparent property line prior to the 1996 renovations. The following is a non-exhaustive summary of their competing positions:

(a) The surveys

[14] The parties have provided many surveys of the two lots, with the earliest dating to 1905. The Applicant submits that these show that fences between the properties were, to a greater or lesser extent, to the west of the actual boundary line since the earliest recorded sketches of the lots, and that the lots of the street are slightly askew and do not run exactly north-south.

[15] The Respondent relies most heavily on the 1996 survey obtained by Ms. L’Aventure when she sold the property to the Applicant, which shows only a 0.2 foot encroachment of the fence present at the time. The Applicant disputes the accuracy of this measurement and relies on the location of fenceposts noted on this survey and submits that the present fence is east of those posts which is consistent with his position.

(b) The tree

[16] As mentioned at paragraph 5, a large maple tree was near the south end of the properties and was agreed by all to be partly on each lot. The tree came down and was entirely removed after the Applicant bought and renovated 81 Pears. The Applicant relies on the recollection of Ms. L’Aventure and Fraser that the tree was mostly on the 81 Pears lot.

[17] The Respondent notes that there is a gap in the concrete of the Applicant’s car pad that is visible where the tree used to stand in photographs of the present backyard. He submits that this gap reflects that the Applicant is now claiming the entire area where the tree would have stood, which is inconsistent with the evidence from before 1996. The Applicant responds that the level of the backyard was raised by four feet in 1996 and that there is evidence that the tree veered to the east, such that the hole in the concrete would not reflect exactly where the base of the tree stood before the renovations.

(c) The east-west retaining wall

[18] The Respondent has produced pictures he says shows that a pre-existing stone retaining wall that ran east-west along his property has been chiseled at the boundary of the properties, showing encroachment that took place in 1996. The Applicant disputes this and says that the pictures depict a concrete cap.

[19] The Applicant relies on the evidence of Fraser that Kyrkarios wanted nothing done that would affect the retaining walls built on his property and that they respected his wishes. The Respondent counters that this is inconsistent with the Applicant’s own testimony that he used cinderblocks to reinforce a wall built by Kyrkarios.

(d) The north-south retaining wall and the ground-penetrating radar evidence

[20] The Respondent argues that the north-south retaining wall that used to mark one stretch of the boundary between the properties was removed during the 1996 renovations. The Applicant submits that this wall was not removed but was built over when the backyard was raised by four feet to create the carport, and that it is buried on the present 83 Pears backyard area.

[21] The Applicant submitted a report from a firm that conducted ground-penetrating radar surveying of the 81 Pears backyard and found no evidence of a buried stone wall. The Applicant says that the Respondent refused an offer to do GPR testing of the 83 Pears backyard that would likely have shown the presence of the wall. The Respondent disputes the details of the negotiations on this subject, questions the proven reliability of the GPR testing, and relies on videos digging into the corner of the carport where no sign of the wall can be seen. The Applicant suggests the wall is to the west of the area depicted in the videos.

Conclusion

[22] I have carefully considered all of the evidence and arguments put forward by both parties. I conclude that I am unable to make any reliable determination of where the effective boundary was before the 1996 renovations.

[23] The main direct evidence on the issue is the testimony of the Applicant and Fraser that in carrying out the renovations they respected the existing indications of the boundary line. I accept that they intended to do this and that they sincerely believe that they did so – it is obvious that both parties are sincerely convinced of the correctness of their position. I further accept the Applicant’s evidence that he had no intention of making a “land grab” and Fraser’s evidence that Kyrkarios was frequently present and witnessed much of the work with no objection. However, I am not convinced that their memories of these events from more than 20 years ago, recalled through the lens of this dispute, are sufficiently accurate to give me any confidence that the 1996 renovations did not move the effective boundary by a very small margin to the west.

[24] As the Respondent notes, the Applicant and Fraser have been able to produce no surveys, plans, permits, or engineering drawings reflecting the work they did. A simple examination of the boundary left after the 1996 work does not give the appearance that a straight and simple fence-line was followed. The Applicant himself aptly referred to the concrete pour done for the car pad around where the tree used to stand as a “zig zag mess.”

[25] It is certainly possible that the effective boundary before this work was the same or to the west. But I am not satisfied of this on a balance of probabilities and accordingly the adverse possession claim fails.

The claim under the Conveyancing and Law of Property Act

[26] The alternative basis for the Applicant’s claim is under s.37(1) of the Act, which reads as follows:

37 (1) Where a person makes lasting improvements on land under the belief that it is the person’s own, the person or the person’s assigns are entitled to a lien upon it to the extent of the amount by which its value is enhanced by the improvements, or are entitled or may be required to retain the land if the Superior Court of Justice is of opinion or requires that this should be done, according as may under all circumstances of the case be most just, making compensation for the land, if retained, as the court directs.

[27] The Applicant relies on the decision of Flynn J. in Dupuis-Bissonnette v. WM. J. Gies Construction; WM. J. Gies Construction v. Dupuis-Bissonnette, 2010 ONSC 3680, a case with factual similarities to the case at bar. In that case, the applicants built a retaining wall on the property of a neighbouring lot in the belief that the land was theirs. The encroachment was only discovered six years later. Flynn J. noted that the area in dispute was less than 1.5% of the neighbouring lot’s proper size and found that the applicants should be entitled to retain the land in exchange for compensation. See also Corkery v. Moffitt, 2022 ONSC 105, where a similar result was reached, for a detailed review of the relevant authorities.

[28] As discussed above, I accept that the Applicant honestly believed that the improvements he made were on his property. This was not seriously disputed at the hearing. The Respondent did however contend that the work done did not represent “lasting improvements.” In my view, the retaining wall, fencing, sea channel, and concrete pour and raising of the car pad represent lasting improvements permitting the application of s. 37(1).

[29] I accept the Applicant’s position that the balance of convenience strongly favours permitting him to keep the disputed area. The boundary stood for more than 20 years with no complaint. I would also observe that both lots appear to have minor encroachments from neighbours on the other side and that the evidence suggests some minor encroachments have been normal on Pears Ave. historically.

[30] Awarding the disputed area to the Respondent would require significant renovations to the Applicant’s backyard including modifying a gate and stairs and potentially a retaining wall for the purpose of adding an objectively insignificant area to the Respondent’s property. When the Respondent’s wife Paola was cross-examined about her plans for the backyard, she was given every opportunity to explain why the disputed area was essential to them, and she could not articulate any compelling reason beyond wanting all of the space they were entitled to given that they have a large family. While this is an understandable point of view, I do not believe it is reasonable at this point in time to force the Applicant to do extensive work to undo the renovations he did in the honest belief that he was respecting the existing property line.

[31] The Respondent is entitled to compensation for the land retained by the Applicant. In oral argument, the Applicant’s counsel suggested that this should be calculated by determining the lot’s value in 1996 and assessing the percentage of the lot that has been lost. The Respondent’s counsel did not propose a method or amount.

[32] I would urge the parties to attempt to negotiate fair compensation and end this neighbour dispute on a point of agreement. If they are unable to do so, the parties can contact my assistant at josie.harvey@ontario.ca to schedule a case conference to discuss how the compensation should be determined.

[33] While the Applicant has been successful in retaining the disputed area, I take into account that the Respondent is, as Flynn J. put it in Dupuis-Bissonnette, supra, an “innocent party” who is involuntarily losing part of his deeded property. I would order that the parties bear their own costs.

Dineen J. Released: February 27, 2023